Discover the transformative potential of refining used lubricating oil, a business idea rooted in sustainability and innovation. Extracted from crude petroleum through distillation, lubricating oil is a high-value product essential for enhancing the efficiency and longevity of machines and instruments by reducing friction-induced wear and tear. The market demand for refined lubricating oil is on the rise, offering a lucrative opportunity for producing 3,500 liters monthly, totaling 42,000 liters annually. With an estimated revenue potential of US$10,530 per month and US$126,360 per year, boasting a profit margin of 20%, the initial investment requirement for this project stands at US$16,800.
Production Process
The production process involves collecting used lubricating oil in tanks, transferring it to a dehydration tank, and heating it to separate water from oil. The moisture-free oil is then treated with concentrated sulfuric acid in a settling tank to remove impurities. Following this, the oil undergoes vacuum heating, and additives are incorporated to attain desired properties, ensuring the refined oil closely resembles the original lubricating oil.
General Costs (Overheads)
To streamline operations, production costs are calculated based on a capacity of 135 liters of refined lubricating oil per day, operating 312 days per year. Depreciation is accounted for over a 4-year period at a rate of 25% annually for all assets, covering materials, supplies, and direct production expenses to ensure cost-effectiveness and efficiency.
Market Analysis
The demand for lubricating oil surpasses its supply in both urban and rural areas, with a significant portion utilized by industries and automobiles. Additionally, lubricating oil serves as a critical component in blending various oils such as spindle oil, transformer oil, axle oil, and hydraulic oil, catering to a diverse range of applications and industries.
Availability of Raw Materials and Equipment
Key raw materials like used lube oil, lime, and additives can be sourced locally from Kilembe mines or imported from Libya, ensuring a sustainable supply chain. Equipment essential for the distillation process, such as absorbers and vacuum pumps, can be procured from international markets like China and Japan, guaranteeing quality and operational efficiency.
In conclusion, venturing into the refining of used lubricating oil in Kenya not only addresses the growing market demand for high-quality lubricants but also contributes to environmental sustainability by repurposing and revitalizing resources.
